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Dont Save When You Owe Money.
 People are funny creatures. We don't always do whats best for us - rather, we do what feels best, and try to blank out any reasons why it might not be the right thing to do. Possibly that's why there are so many people who have both savings and debts.
Its an Issue of Psychology.
Sure, it makes you feel better to have savings. Saving feels like you're building a cornerstone for your future, while paying off what you owe makes you feel like you're throwing your money into a hole. That money is for the kids future, or for improving your home, or whatever else - and it's in an account pulling in a useful rate of interest. What could be unreasonable about that? A great deal, if you are in debt.
Dont Be Fooled.
There are almost no savings accounts that will offer you interest rates as high as the ones credit cards charge. Heres a question: if you have $10,000 in a bank account realizing 5% a year and $5,000 on a credit card at an interest rate of 20% per year, how much cash do you have? After only five years, the answer is effectively nothing - what you owe would have grown to around $12,500, the same amount of money that your savings are now worth.
You might not think it now, but it truly is much better to pay off your debts. If you utilised one half of your savings to pay off that debt, youd be in a much better spot that it's truly astounding. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your savings account, bringing in interest - after five years, that's around $6,380.
If youd still rather keep your savings intact instead of using them to pay off your debts, ask yourself this elementary question: is your pride worth $6,380 of your familys money?
Think of Your Financial Health.
Once you get sufficient cash to pay off your debt, theres absolutely no reason on earth to hang on to it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money - you need as much of your financial resources as possible to be savings, not debts. If your savings account and credit card are with the same bank, then youre effectively paying for the privilege of borrowing your own money from them. Why would you do that?
There are more benefit's to lowering your debt with savings. Youll be less worried about your debts, and your credit report will show that you were able to pay everything back - resulting in getting you a much smaller interest rate if you ever have to go into debt again.
I know it's never easy. You just have to bear in mind that any cash you've saved hasnt actually been saved at all. Its money you ought to have been spending rather than buying things with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your children's education - but always bear in mind that whenever you use a credit card to spend that same amount of money, youre spending away your future, plus interest. In any event, if you've got the debt, then that cash in the bank has already been spent - stop denying it to yourself.
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